January 31, 2012 09:32 ET: Progress on swap negotiations; German retail sales fell but unemployment change declined; UK mortgage approvals rose but net consumer credit fell; the ECB is buying Portuguese bonds via SMP; EURCHF near 1.20 floor. Canada GDP disappointed. US Chicago PMI and consumer confidence due next. Latest Premium Trades are out Buy the Euro Dip of Sell the Euro Bounce? See below.
USD is broadly weaker today as the risk rally continues. Major European equities are gaining 1% and relative strength winners are NZD followed by CAD.
The risk rally continues, fuelled by Eurogroup's Juncker and Greek PM Papademos comments of significant progress towards a Greek swap agreement.
German data was mixed today as monthly retail sales fell -1.4% in December after -1% contraction seen in November (-0.9% from +0.9% y/y) but the number of unemployed people fell -34K in January after December's improvement by -22K.
The UK also had mixed reports today. Mortgage approvals rose in December to 52.9K from previous 52.6K which is the highest print since the end of 2009 but net consumer credit declined by GBP 377M, the largest monthly fall on record. In the Eurozone, the unemployment rate remained steady at 10.4% in December.
Portugal yields soared yesterday (5 year to 23% and 10 year to 18%) but pulled back today a bit. Traders noted ECB buying via the SMP.
Noteworthy is also that EURCHF trades just a few dozen points above the SNB determined floor 1.20. Whether the SNB decides to flush out the reported large stop losses right below the level remains to be seen but from a credibility point of view it is hard to imagine that the SNB would give up defending the 1.20 floor.
Canadian GDP fell 0.1% in Nov vs expectations of a rise of 0.2%, following an unchanged reading in October.
January Chicago PMI is due at 9:45 am and should show a slight increase to 63.1 from 62.5. Consumer confidence which comes 15 minutes later is seen higher at 68.2 from 64.5.
Our latest Premium Intermarket Insights for Tuesday are out Buy the Euro Dip of Sell the Euro Bounce, with new trades in EURUSD, AUDUSD, CADJPY and US crude oil http://ashraflaidi.com/ products/ sub01/ access/ ?a=592
Patrik Urban
Tuesday, January 31, 2012
Monday, January 30, 2012
Onto Another EU Summit, US Inflation in Focus
http://www.ashraflaidi.com/forex-news/?a=3083
January 30, 2012 07:37 ET: Greece rejects German plan for Greek budget oversight; EU summit starts in Brussels; Italian auction results in decent take up; EZ economic confidence rose but consumer confidence was revised lower. Market turns to core US PCE, personal income and spending.
USD is slightly stronger since London open. Major European equities are lower by about 1%.
Even though the WSJ suggested that Greek swap negotiations were close to an agreement, the common currency came under pressure as soon as the Asian session started. USD buying continued through the beginning of the London session primarily on news that Greece rejected German plan of EU oversight over Greek budget indicating an existing level of distrust.
Noteworthy comment was made yesterday by Greek PM Papademos who said that unless a new bailout is agreed on, Greece would not be able to pay off its debt and it would be forced out of the Eurozone.
The first 2012 EU summit starts today in Brussels with two key aims. Progress on creation of the fiscal union and approval of changes necessary for the ESM introduction.
Italy sold EUR 7.475 bln worth of various BTPs maturing between 2016 and 2022 (target EUR 5.5 to 8 bln). The average yields were lower but continue to be elevated and bid to cover ranged between 1.29 and 1.87. Italian spreads widened ahead of the auction but paired back on unconfirmed reports that the ECB was checking Italian 5 year and 7 year rates. Other news from Italy include business confidence that fell to 92.1 in January from 92.5. This is the weakest result since end of 2009.
On the data front, Eurozone economic confidence rose in January to 93.4 from 92.8 and Eurozone consumer confidence was revised lower to -20.7 from -20.6. German CPI is still being collected with results due later today. January CPI is seen higher at 2.4% from 2.3% y/y.
The NY session starts at 8:30 am ET with core PCE price index which is expected to hold steady in December at 0.1% m/m and 1.7% y/y. Given the FED's decision to target inflation using the PCE index, the market impact of the release may become greater.
Personal income which is due at the same time is seen higher at 0.4% from November's 0.1% and personal spending is anticipated to rise 0.2% after previous 0.1% growth.
Thursday night's Premium euro longs were not filled (missed by 3 pips), bu keep an eye on the USDCAD longs. The rest of those Premium trades are accompanied by 4 charts on Gold, EUR, US crude and Eurozone spreads. http://ashraflaidi.com/ products/ sub01/ access/ ?a=590 Non subscribers click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
January 30, 2012 07:37 ET: Greece rejects German plan for Greek budget oversight; EU summit starts in Brussels; Italian auction results in decent take up; EZ economic confidence rose but consumer confidence was revised lower. Market turns to core US PCE, personal income and spending.
USD is slightly stronger since London open. Major European equities are lower by about 1%.
Even though the WSJ suggested that Greek swap negotiations were close to an agreement, the common currency came under pressure as soon as the Asian session started. USD buying continued through the beginning of the London session primarily on news that Greece rejected German plan of EU oversight over Greek budget indicating an existing level of distrust.
Noteworthy comment was made yesterday by Greek PM Papademos who said that unless a new bailout is agreed on, Greece would not be able to pay off its debt and it would be forced out of the Eurozone.
The first 2012 EU summit starts today in Brussels with two key aims. Progress on creation of the fiscal union and approval of changes necessary for the ESM introduction.
Italy sold EUR 7.475 bln worth of various BTPs maturing between 2016 and 2022 (target EUR 5.5 to 8 bln). The average yields were lower but continue to be elevated and bid to cover ranged between 1.29 and 1.87. Italian spreads widened ahead of the auction but paired back on unconfirmed reports that the ECB was checking Italian 5 year and 7 year rates. Other news from Italy include business confidence that fell to 92.1 in January from 92.5. This is the weakest result since end of 2009.
On the data front, Eurozone economic confidence rose in January to 93.4 from 92.8 and Eurozone consumer confidence was revised lower to -20.7 from -20.6. German CPI is still being collected with results due later today. January CPI is seen higher at 2.4% from 2.3% y/y.
The NY session starts at 8:30 am ET with core PCE price index which is expected to hold steady in December at 0.1% m/m and 1.7% y/y. Given the FED's decision to target inflation using the PCE index, the market impact of the release may become greater.
Personal income which is due at the same time is seen higher at 0.4% from November's 0.1% and personal spending is anticipated to rise 0.2% after previous 0.1% growth.
Thursday night's Premium euro longs were not filled (missed by 3 pips), bu keep an eye on the USDCAD longs. The rest of those Premium trades are accompanied by 4 charts on Gold, EUR, US crude and Eurozone spreads. http://ashraflaidi.com/ products/ sub01/ access/ ?a=590 Non subscribers click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Friday, January 27, 2012
Euro Firms Despite Higher Portuguese Yields, US GDP Next
January 27, 2012 07:49 ET: Greece PSI talks still ongoing; full take up in Italian auction; Swiss KOF declined, Eurozone M3 growth lower; Portuguese yields soar; ECB deposits decline. Key event is Q4 GDP followed by UoM consumer sentiment. We had 7 new Premium trades yesterday evening, with 4 charts on Gold, EUR, US crude and Eurozone spreads. Focus on EURUSD, ESH, CLF and gold.
The USD is weaker in the ongoing session. European equities are in the -0.2% to +0.3% range and the relative strength winners are NZD followed by AUD.
Even though negotiations on Greece PSI continue and a deal has not been reached yet, the EU commissioner Olli Rehn said today that an agreement will be accomplished very soon, either today or during the weekend. ECB's willingness to participate in the swap is still being discussed.
Italy had another solid auction today as it reached a full take up of EUR 11 bln. EUR 8 bln July 2012 BOT sold with average yield 1.969%, considerably lower compared to previous 3.251. However, bid to cover declined to 1.35 from 1.69.
Next week, Italy and Spain are looking to issue a debt worth of EUR 16 bln vs. EUR 10.1 bln this week.
On the data front, Swiss KOF leading indicator declined in January to -0.17 from December's 0.01. This is the 9th monthly decline in a row and the result is the worst since July 2009 and December M3 money supply rose in the Eurozone annually by 1.6%, somewhat lower compared to previous 2%.
With spotlight on Greece PSI talks and US QE3 hints, market participants are overlooking soaring Portuguese yields (5 year yields nearly 20% and 10 year yielded over 15% earlier today) and the chatter about the need for a second bailout. On Wednesday, the head of Portuguese industry confederation told Reuters that additional EUR 30 bln is needed.
ECB deposits declined to EUR 464.8 bln on Thursday.
The ECB president Mario Draghi will kick off the NY session today at 8:15 am when he delivers a speech at the World Economic Forum in Davos.
The key event will come at 8:30 am when Q4 GDP is due and is expected to improve to 3% from previous 1.8%. The GDP price index is seen lower at 2.0% from 2.6%
The last report of this week is final revision of January UoM consumer sentiment that is expected to be revised higher to 74.2 from initial 74.
The latest Premium trades include 4 charts on Gold, EUR, US crude and Eurozone spreads. Focus on EURUSD, gold and US crude. Direct Access to these trades is here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=590 Non subscribers click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
The USD is weaker in the ongoing session. European equities are in the -0.2% to +0.3% range and the relative strength winners are NZD followed by AUD.
Even though negotiations on Greece PSI continue and a deal has not been reached yet, the EU commissioner Olli Rehn said today that an agreement will be accomplished very soon, either today or during the weekend. ECB's willingness to participate in the swap is still being discussed.
Italy had another solid auction today as it reached a full take up of EUR 11 bln. EUR 8 bln July 2012 BOT sold with average yield 1.969%, considerably lower compared to previous 3.251. However, bid to cover declined to 1.35 from 1.69.
Next week, Italy and Spain are looking to issue a debt worth of EUR 16 bln vs. EUR 10.1 bln this week.
On the data front, Swiss KOF leading indicator declined in January to -0.17 from December's 0.01. This is the 9th monthly decline in a row and the result is the worst since July 2009 and December M3 money supply rose in the Eurozone annually by 1.6%, somewhat lower compared to previous 2%.
With spotlight on Greece PSI talks and US QE3 hints, market participants are overlooking soaring Portuguese yields (5 year yields nearly 20% and 10 year yielded over 15% earlier today) and the chatter about the need for a second bailout. On Wednesday, the head of Portuguese industry confederation told Reuters that additional EUR 30 bln is needed.
ECB deposits declined to EUR 464.8 bln on Thursday.
The ECB president Mario Draghi will kick off the NY session today at 8:15 am when he delivers a speech at the World Economic Forum in Davos.
The key event will come at 8:30 am when Q4 GDP is due and is expected to improve to 3% from previous 1.8%. The GDP price index is seen lower at 2.0% from 2.6%
The last report of this week is final revision of January UoM consumer sentiment that is expected to be revised higher to 74.2 from initial 74.
The latest Premium trades include 4 charts on Gold, EUR, US crude and Eurozone spreads. Focus on EURUSD, gold and US crude. Direct Access to these trades is here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=590 Non subscribers click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Thursday, January 26, 2012
USD Extends Slide; Italian Auction Comes out Strong
January 26, 2012 07:41 ET: Greek negotiations continue; gold firmly above 1700, Italian auction results in a full take up; German Gfk improved; UK CBI sales dropped. Market turns to durable goods, new home sales and later in the session to NZ trade balance data. Euro Premium Intermarket Insight short is underway. Thursday's Premium Intermarket Insight is due before the London closing bell.
The USD is weaker across the board. European equities are gaining about 1% and relative strength winners are NZD and CHF.
The USD continues its decline that started yesterday after the FOMC meeting. Gold is trading nearly 70 USD above yesterday's low 1650 and silver trades firmly above the 33 level. EURUSD broke to 5 week high and reached 1.3170.
Greek debt swap negotiations will continue today after European finance ministers maintained that bondholders should take a bigger loss on their holdings. Should the uncertainty coming from these negotiations continue, the focus could shift in the days ahead away from the FOMC decision back to Greece which would likely see and end of the risk rally.
Italy reached the full target today as it sold EUR 4.5 bln worth of 2014 bond. The average yield fell to 3.763% from 4.833% but bid to cover declined to 1.714 from 2.24.
In other news, ECB deposits declined modestly on Wednesday to EUR 484.1 bln and MNI reports that the ECB is currently buying Portuguese bonds via the SMP. The 10 year yield trades right below 15%.
On the data front, German GfK consumer climate for February improved to 5.9 from 5.7 and CBI retail sales in the UK dropped sharply -22% in January from December's 9% growth. This is the weakest print since 3/2009.
December durable goods orders are due at 8:30 am ET and are seen lower at 2.1% from 3.7% (core orders should rise 0.9% from 0.3%). Jobless claims that are due at the same time are seen higher at 371K from 315K.
New home sales are due at 10:00 am and are anticipated to rise slightly to 321K in December from November's 315K.
The end of the US session is marked by New Zealand trade deficit that is expected to narrow considerably to NZD -47M in December from previous NZD -308M. Trade balance is due at 4:45 pm.
Patrik Urban
The USD is weaker across the board. European equities are gaining about 1% and relative strength winners are NZD and CHF.
The USD continues its decline that started yesterday after the FOMC meeting. Gold is trading nearly 70 USD above yesterday's low 1650 and silver trades firmly above the 33 level. EURUSD broke to 5 week high and reached 1.3170.
Greek debt swap negotiations will continue today after European finance ministers maintained that bondholders should take a bigger loss on their holdings. Should the uncertainty coming from these negotiations continue, the focus could shift in the days ahead away from the FOMC decision back to Greece which would likely see and end of the risk rally.
Italy reached the full target today as it sold EUR 4.5 bln worth of 2014 bond. The average yield fell to 3.763% from 4.833% but bid to cover declined to 1.714 from 2.24.
In other news, ECB deposits declined modestly on Wednesday to EUR 484.1 bln and MNI reports that the ECB is currently buying Portuguese bonds via the SMP. The 10 year yield trades right below 15%.
On the data front, German GfK consumer climate for February improved to 5.9 from 5.7 and CBI retail sales in the UK dropped sharply -22% in January from December's 9% growth. This is the weakest print since 3/2009.
December durable goods orders are due at 8:30 am ET and are seen lower at 2.1% from 3.7% (core orders should rise 0.9% from 0.3%). Jobless claims that are due at the same time are seen higher at 371K from 315K.
New home sales are due at 10:00 am and are anticipated to rise slightly to 321K in December from November's 315K.
The end of the US session is marked by New Zealand trade deficit that is expected to narrow considerably to NZD -47M in December from previous NZD -308M. Trade balance is due at 4:45 pm.
Patrik Urban
Wednesday, January 25, 2012
UK Contracts; FOMC New Line-up / Schedule
January 25, 2012 07:48 ET: German IFO improves and bund auction results in lower yield. UK GDP contracted boosting QE speculation. Market turns to pending home sales, FOMC (statement and press conference see below) and RBNZ.
The USD is currently losing a part of the gains it made earlier during the session. European equity indices are losing about 1% and the biggest relative strength losers are EUR and NZD.
German Ifo data for January surprised to the upside as business climate rose to 108.3 from 107.2 and the expectations component rose to 100.9 from 98.6. Positive news from Germany continued as it sold EUR 2.458 bln worth of 2042 bunds today (target EUR 3 bln). The average yield declined to 2.62% from 2.82% and cover improved to 2.1 from 1.1.
However, the sentiment turned negative and the EUR sold off after MNI reported that hopes of a successful Greece deal are falling which increases the risk that the ECB would take a loss on its Greek debt holdings. The ECB allotted nearly EUR 20 bln in 3 month LTRO today.
In the UK, Q4 GDP contracted -0.2% from +0.6% q/q (0.8% from 0.5% y/y). Larger than expected contraction combined with yesterday's dovish comments from BOE governor Marvyn King are likely to boost QE speculation. MPC meeting minutes showed unanimous rate decision and some members stated again that further QE was likely needed. BBA mortgage approvals rose in December to 36.2K from 34.8K. GBP first weakened across the board but quickly recovered losses and trades at 1.5575 against the USD.
The US session starts today at 8:15 am ET when the ECB president Mario Draghi participates in a panel discussion about Europe's outlook.
The first release of the day is pending home sales that are expected to drop -0.6% in December after solid 7.3% growth seen in November.
FOMC SCHEDULE:
12:30 EST, 17:30 GMT:
Federal Open Market Committee decision
14:00/19:00
Federal Reserve published FOMC participants, federal funds rate projections for the first time, accompanied by updated quarterly, economic assumptions.
14:15/19:15
Chairman Ben Bernanke holds news conference to present the FOMC's current economic projections.
The FOMC will keep rates below 0.25% and release its statement at 12:30 pm and the press conference will follow at 2:15 pm. Given the recent fundamental improvements, especially in the labor market, the commission is unlikely to start hinting new QE at present but will stick to its "exceptionally low fed funds rate through 2013" forecast. Today will be the first time when the FOMC will announce its interest rates projections which are likely to be traders' main focus.
Later in the session at 3:00 pm, the RBNZ will announce its rate decision and release its statement. Rates are expected to stay at 2.5%.
Latest Premium trades are here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=589 To subscribe, pls click here: http://ashraflaidi.com/ products/ sub01
Patrik Urban
The USD is currently losing a part of the gains it made earlier during the session. European equity indices are losing about 1% and the biggest relative strength losers are EUR and NZD.
German Ifo data for January surprised to the upside as business climate rose to 108.3 from 107.2 and the expectations component rose to 100.9 from 98.6. Positive news from Germany continued as it sold EUR 2.458 bln worth of 2042 bunds today (target EUR 3 bln). The average yield declined to 2.62% from 2.82% and cover improved to 2.1 from 1.1.
However, the sentiment turned negative and the EUR sold off after MNI reported that hopes of a successful Greece deal are falling which increases the risk that the ECB would take a loss on its Greek debt holdings. The ECB allotted nearly EUR 20 bln in 3 month LTRO today.
In the UK, Q4 GDP contracted -0.2% from +0.6% q/q (0.8% from 0.5% y/y). Larger than expected contraction combined with yesterday's dovish comments from BOE governor Marvyn King are likely to boost QE speculation. MPC meeting minutes showed unanimous rate decision and some members stated again that further QE was likely needed. BBA mortgage approvals rose in December to 36.2K from 34.8K. GBP first weakened across the board but quickly recovered losses and trades at 1.5575 against the USD.
The US session starts today at 8:15 am ET when the ECB president Mario Draghi participates in a panel discussion about Europe's outlook.
The first release of the day is pending home sales that are expected to drop -0.6% in December after solid 7.3% growth seen in November.
FOMC SCHEDULE:
12:30 EST, 17:30 GMT:
Federal Open Market Committee decision
14:00/19:00
Federal Reserve published FOMC participants, federal funds rate projections for the first time, accompanied by updated quarterly, economic assumptions.
14:15/19:15
Chairman Ben Bernanke holds news conference to present the FOMC's current economic projections.
The FOMC will keep rates below 0.25% and release its statement at 12:30 pm and the press conference will follow at 2:15 pm. Given the recent fundamental improvements, especially in the labor market, the commission is unlikely to start hinting new QE at present but will stick to its "exceptionally low fed funds rate through 2013" forecast. Today will be the first time when the FOMC will announce its interest rates projections which are likely to be traders' main focus.
Later in the session at 3:00 pm, the RBNZ will announce its rate decision and release its statement. Rates are expected to stay at 2.5%.
Latest Premium trades are here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=589 To subscribe, pls click here: http://ashraflaidi.com/ products/ sub01
Patrik Urban
Tuesday, January 24, 2012
EURUSD Little Changed Despite Decent Data & Auctions
http://www.ashraflaidi.com/forex-news/?a=3068
January 24, 2012 07:37 ET: Eurozone industrial orders fell but PMIs improved; German PMIs also stronger. UK public net sector borrowing declined; solid Spanish auction. Market turns to Canadian retail sales while awaiting news from EconFin. 1st of 2-day FOMC meeting starts today. Monday nights Premium trades are mostly in progress, and are relevant into Wednesday evenings FOMC decision.
EURUSD holds above $1.30 after extending as high as 1.3060s earlier. USD is weaker against the GBP and firmer against JPY, CAD and AUD. Major European equities are losing nearly 1% and the relative strength winner is GBP.
Eurozone industrial orders fell -1.3% in November after 1.5% growth seen in October, January PMI manufacturing printed 48.7 from 46.9 and PMI services improved to 50.5 from 48.8. German January PMI manufacturing rose to 50.9 from 48.4 and PMI services grew strong 54.4 from 52.4. Despite the improving January data EURUSD could not rally and continues to trade right above the 1.30 level.
UK public sector net borrowing reached GBP 10.8 bln in December which is a narrower deficit compared to November's GBP 15.1 bln.
Spain sold EUR 2.51 bln worth of bills today (target EUR 1.5-2.5 bln). Results are solid as yields declined and bid to cover rose. One indication that the European periphery carry trade is not as widely employed as some believe are ECB deposits that continue to be elevated and on Monday were virtually unchanged compared to Friday at EUR 490.5 bln.
Today marks the second day of the Eurozone finance ministers meeting. Markets will be on a lookout for news and rumors of progress on the ESM-EFSF bailout mechanism and developments with the ongoing Greek debt talks. Formal offer on Greek bond swap should be announced on 2/13.
The US session starts at 8:30 am ET with Canadian retail sales that are seen lower in November at 0.3% from previous 0.7% (core sales lower at 0.2% from 0.7%) followed by Richmond manufacturing due at 10:00 am which is expected to rise to 6 in January from December's 3.
CHF volatility could increase at 11:15 am when SNB governing member J. P. Danthine speaks in Zurich. Heavy stops on EURCHF below 1.2050 and "massive" stops below 1.20 are reported. The OECD said today that the SNB should weigh benefits of FX intervention. GBP could experience erratic moves at 3:00 pm when BOE governor Mervyn King speaks in Brighton.
EURUSD, USDCAD, AUDNZD, USDJPY premium trades are partly in progress. Click here for direct access to all 14 trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=589 To subscribed, click here: http://ashraflaidi.com/ products/ sub01
Patrik Urban
January 24, 2012 07:37 ET: Eurozone industrial orders fell but PMIs improved; German PMIs also stronger. UK public net sector borrowing declined; solid Spanish auction. Market turns to Canadian retail sales while awaiting news from EconFin. 1st of 2-day FOMC meeting starts today. Monday nights Premium trades are mostly in progress, and are relevant into Wednesday evenings FOMC decision.
EURUSD holds above $1.30 after extending as high as 1.3060s earlier. USD is weaker against the GBP and firmer against JPY, CAD and AUD. Major European equities are losing nearly 1% and the relative strength winner is GBP.
Eurozone industrial orders fell -1.3% in November after 1.5% growth seen in October, January PMI manufacturing printed 48.7 from 46.9 and PMI services improved to 50.5 from 48.8. German January PMI manufacturing rose to 50.9 from 48.4 and PMI services grew strong 54.4 from 52.4. Despite the improving January data EURUSD could not rally and continues to trade right above the 1.30 level.
UK public sector net borrowing reached GBP 10.8 bln in December which is a narrower deficit compared to November's GBP 15.1 bln.
Spain sold EUR 2.51 bln worth of bills today (target EUR 1.5-2.5 bln). Results are solid as yields declined and bid to cover rose. One indication that the European periphery carry trade is not as widely employed as some believe are ECB deposits that continue to be elevated and on Monday were virtually unchanged compared to Friday at EUR 490.5 bln.
Today marks the second day of the Eurozone finance ministers meeting. Markets will be on a lookout for news and rumors of progress on the ESM-EFSF bailout mechanism and developments with the ongoing Greek debt talks. Formal offer on Greek bond swap should be announced on 2/13.
The US session starts at 8:30 am ET with Canadian retail sales that are seen lower in November at 0.3% from previous 0.7% (core sales lower at 0.2% from 0.7%) followed by Richmond manufacturing due at 10:00 am which is expected to rise to 6 in January from December's 3.
CHF volatility could increase at 11:15 am when SNB governing member J. P. Danthine speaks in Zurich. Heavy stops on EURCHF below 1.2050 and "massive" stops below 1.20 are reported. The OECD said today that the SNB should weigh benefits of FX intervention. GBP could experience erratic moves at 3:00 pm when BOE governor Mervyn King speaks in Brighton.
EURUSD, USDCAD, AUDNZD, USDJPY premium trades are partly in progress. Click here for direct access to all 14 trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=589 To subscribed, click here: http://ashraflaidi.com/ products/ sub01
Patrik Urban
Monday, January 23, 2012
USD Hit by a Risk-on Monday, Awaiting EcoFin
January 23, 2012 08:04 ET: ESM and ESFS may run in parallel; Greek negotiations to continue; German bond auction results in lower yield; ECB deposits rose. Market turns to Canadian leading indicators and EconFin meeting. Risk-on-Mondays weighing on USD across the board. EURUSD regains $1.30. S&P500 futures at 1312.
When Asia opened, the USD gapped higher on the back of a no agreement on the Greek debt. Yet, since London traders got to their desks they have been selling the buck across the board. European equities are higher by 0.3% to 0.7% and the relative strength winners are NZD and CHF.
EURUSD moved higher on German budget spokesman Norbert Barthle comments that the ESM and ESFS could be run together. The common currency jumped 100+ points higher above daily low and trades right at 1.30 resistance.
Negotiations continue between Greece and private creditors and a draft proposal should be presented today at the Eurozone finance ministers meeting in Brussels. Topics for discussions will also include new budget rules and protection of the Eurozone countries from the indebted states.
Germany sold EUR 2.54 bln (EUR 3 bln target) worth of 1 year bond today with average yield falling to 0.07% from previous 0.346%. However, bid to cover fell to 2.2 from 4.3. Bond issuance in the Eurozone is expected to fall back this week to around EUR 9 bln from nearly EUR 30 bln last week. Focus will turn to Spain that will sell 3 and 6 months bills tomorrow.
In other news, the ECB deposits rose on Friday to EUR 491.78 bln from Thursday's EUR 420.9 bln which is still considerably below last Tuesday's record of EUR 528.18 bln; Croatians approved joining the EU as its 28th member during the weekend. EU members have to ratify the result and the entry is expected in mid 2013. The EU formally agreed on oil embargo against Iran.
The US session starts with Canadian leading indicators due at 8:30 am ET that are seen lower in December at 0.6% from November's 0.8% followed by Eurozone consumer confidence that is expected to improve marginally in January to -20 from previous -21.1.
There is no US data due today.
Patrik Urban
When Asia opened, the USD gapped higher on the back of a no agreement on the Greek debt. Yet, since London traders got to their desks they have been selling the buck across the board. European equities are higher by 0.3% to 0.7% and the relative strength winners are NZD and CHF.
EURUSD moved higher on German budget spokesman Norbert Barthle comments that the ESM and ESFS could be run together. The common currency jumped 100+ points higher above daily low and trades right at 1.30 resistance.
Negotiations continue between Greece and private creditors and a draft proposal should be presented today at the Eurozone finance ministers meeting in Brussels. Topics for discussions will also include new budget rules and protection of the Eurozone countries from the indebted states.
Germany sold EUR 2.54 bln (EUR 3 bln target) worth of 1 year bond today with average yield falling to 0.07% from previous 0.346%. However, bid to cover fell to 2.2 from 4.3. Bond issuance in the Eurozone is expected to fall back this week to around EUR 9 bln from nearly EUR 30 bln last week. Focus will turn to Spain that will sell 3 and 6 months bills tomorrow.
In other news, the ECB deposits rose on Friday to EUR 491.78 bln from Thursday's EUR 420.9 bln which is still considerably below last Tuesday's record of EUR 528.18 bln; Croatians approved joining the EU as its 28th member during the weekend. EU members have to ratify the result and the entry is expected in mid 2013. The EU formally agreed on oil embargo against Iran.
The US session starts with Canadian leading indicators due at 8:30 am ET that are seen lower in December at 0.6% from November's 0.8% followed by Eurozone consumer confidence that is expected to improve marginally in January to -20 from previous -21.1.
There is no US data due today.
Patrik Urban
Friday, January 20, 2012
Euro Stabilizes, Awaiting US Home Sales
http://www.ashraflaidi.com/forex-news/?a=3062
January 20, 2012 08:04 ET: Rumor of a Greek deal; UK retail sales rose; German PPI declined; ECB deposits rose; Canadian CPI drops. Market turns to Canadian wholesale sales and US existing home sales. Latest Premium trades (issued last night) are modestly bullish euro. They also include 4 charts on euro and US crude oil.
USD is stronger against all majors with the exception of NZD that is also the relative strength winner in the ongoing session. Major European equities are lower by about 0.5%.
MNI reports a market rumor of a Greek agreement for its PSI deal. The entire Greek debt should be replaced by 30 year bond with coupon rising from 3.1% to 4.75%. Final terms should be announced later today by the IIF. Somewhat surprisingly, EURUSD has not risen on the news and continues to hover right above 1.29.
In the UK, retail sales rose 0.6% in December from previous -0.8% which translates to 2.6% from 0.4% y/y. The growth was attributed to record sales of clothes and footwear that despite the slowing economy grew 1.8% m/m and reached highest level since 1988. GBPUSD trades around 1.5450 after reaching a high at 1.5497.
German PPI declined to 4.0% on annual basis in December, a considerable decline from November's 5.2% (-0.4% from +0.1% m/m). As anticipated, slower growth is slowing pipeline pressure so consumer inflation is likely to fall in the coming months. EURUSD fell on the news from 1.2970 to 1.2890 but has recovered and trades firmly above 1.29.
ECB deposits rose to EUR 420.9 bln on Thursday but this amount is still significantly lower compared to record high EUR 528.18 bln hit on Tuesday.
Consumer inflation in Canada fell in December to -0.6% from previous 0.1% m/m (2.3% from 2.9% y/y). Core fell to -0.5% from +0.1% (1.9% from 2.1% y/y). This is the biggest fall in six months. USDCAD jumped from 1.0135 to 1.0160 on the news.
The New York session will start at 8:30 am ET with Canadian wholesale sales that are seen slightly lower in November at 0.8% from October's 0.9% followed by US existing homes sales at 10:00 am that are expected to show an increase in December to 4.65M from previous 4.42M.
The latest Premium trades include 4 charts on US crude oil and EURUSD, taking cautious positioning in EURUSD & EURJPY, with a new focus on US crude oil and AUDUSD. Direct Access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=585 To subscribe, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
January 20, 2012 08:04 ET: Rumor of a Greek deal; UK retail sales rose; German PPI declined; ECB deposits rose; Canadian CPI drops. Market turns to Canadian wholesale sales and US existing home sales. Latest Premium trades (issued last night) are modestly bullish euro. They also include 4 charts on euro and US crude oil.
USD is stronger against all majors with the exception of NZD that is also the relative strength winner in the ongoing session. Major European equities are lower by about 0.5%.
MNI reports a market rumor of a Greek agreement for its PSI deal. The entire Greek debt should be replaced by 30 year bond with coupon rising from 3.1% to 4.75%. Final terms should be announced later today by the IIF. Somewhat surprisingly, EURUSD has not risen on the news and continues to hover right above 1.29.
In the UK, retail sales rose 0.6% in December from previous -0.8% which translates to 2.6% from 0.4% y/y. The growth was attributed to record sales of clothes and footwear that despite the slowing economy grew 1.8% m/m and reached highest level since 1988. GBPUSD trades around 1.5450 after reaching a high at 1.5497.
German PPI declined to 4.0% on annual basis in December, a considerable decline from November's 5.2% (-0.4% from +0.1% m/m). As anticipated, slower growth is slowing pipeline pressure so consumer inflation is likely to fall in the coming months. EURUSD fell on the news from 1.2970 to 1.2890 but has recovered and trades firmly above 1.29.
ECB deposits rose to EUR 420.9 bln on Thursday but this amount is still significantly lower compared to record high EUR 528.18 bln hit on Tuesday.
Consumer inflation in Canada fell in December to -0.6% from previous 0.1% m/m (2.3% from 2.9% y/y). Core fell to -0.5% from +0.1% (1.9% from 2.1% y/y). This is the biggest fall in six months. USDCAD jumped from 1.0135 to 1.0160 on the news.
The New York session will start at 8:30 am ET with Canadian wholesale sales that are seen slightly lower in November at 0.8% from October's 0.9% followed by US existing homes sales at 10:00 am that are expected to show an increase in December to 4.65M from previous 4.42M.
The latest Premium trades include 4 charts on US crude oil and EURUSD, taking cautious positioning in EURUSD & EURJPY, with a new focus on US crude oil and AUDUSD. Direct Access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=585 To subscribe, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Thursday, January 19, 2012
Solid Spanish and French Auctions Lifted EURUSD Above 1.29
http://www.ashraflaidi.com/forex-news/?a=3058
January 19, 2012 07:31 ET: Spanish and French solid auctions underpin the common currency; Eurozone current account deficit narrowed; ECB deposits fell considerably. Focus turns to CPI, jobless claims, housing data and Philly FED index.
USD is mixed in the ongoing session. It is stronger against NZD and JPY, unchanged against GBP and weaker against the rest of the majors. European equities are higher by about 0.75%.
Another strong bond auction came from Spain as it sold EUR 6.61 bln worth of bonds today (EUR target 3.5-4.5 bln). Average yields were generally lower compared to the previous auction.
Despite the recent downgrade, French bond auction nearly reached its EUR 8 bln target as France sold EUR 7.965 bln worth of bonds. The largest auction was for EUR 3.429 bln 2016 bond that averaged 1.89% yield, considerably lower from previous 2.82% with bid to cover improving to 2.12 from 1.68. Other yields and cover also improved.
Fundamental news from Europe was limited to current account deficit that narrowed in November to EUR -1.8 bln from previous EUR -6.6 bln.
In other news, ECB deposits dropped sharply on Wednesday to EUR 395 bln from Tuesday record high of EUR 528.184 bln and Italian PM Mario Monti announced a cabinet meeting for tomorrow that aims to approve plans designed to improve Italian competitiveness.
The US session starts at 8:30 am ET with annual CPI that is expected to decline in December to 3.1% from previous 3.4% while the annual core inflation is seen steady at 2.2%. Jobless claims should come back lower to 387K from previous rise to 399K.
Housing starts are seen steady in December at 685K while building permits are anticipated lower at 675K from previous 681K.
Canadian manufacturing sales due at the same time are seen higher at 1% in November from October's 0.8%.
Philly FED index is due at 10:00 am is expected to rise to 10.7 in January from previous 10.3.
Patrik Urban
January 19, 2012 07:31 ET: Spanish and French solid auctions underpin the common currency; Eurozone current account deficit narrowed; ECB deposits fell considerably. Focus turns to CPI, jobless claims, housing data and Philly FED index.
USD is mixed in the ongoing session. It is stronger against NZD and JPY, unchanged against GBP and weaker against the rest of the majors. European equities are higher by about 0.75%.
Another strong bond auction came from Spain as it sold EUR 6.61 bln worth of bonds today (EUR target 3.5-4.5 bln). Average yields were generally lower compared to the previous auction.
Despite the recent downgrade, French bond auction nearly reached its EUR 8 bln target as France sold EUR 7.965 bln worth of bonds. The largest auction was for EUR 3.429 bln 2016 bond that averaged 1.89% yield, considerably lower from previous 2.82% with bid to cover improving to 2.12 from 1.68. Other yields and cover also improved.
Fundamental news from Europe was limited to current account deficit that narrowed in November to EUR -1.8 bln from previous EUR -6.6 bln.
In other news, ECB deposits dropped sharply on Wednesday to EUR 395 bln from Tuesday record high of EUR 528.184 bln and Italian PM Mario Monti announced a cabinet meeting for tomorrow that aims to approve plans designed to improve Italian competitiveness.
The US session starts at 8:30 am ET with annual CPI that is expected to decline in December to 3.1% from previous 3.4% while the annual core inflation is seen steady at 2.2%. Jobless claims should come back lower to 387K from previous rise to 399K.
Housing starts are seen steady in December at 685K while building permits are anticipated lower at 675K from previous 681K.
Canadian manufacturing sales due at the same time are seen higher at 1% in November from October's 0.8%.
Philly FED index is due at 10:00 am is expected to rise to 10.7 in January from previous 10.3.
Patrik Urban
Wednesday, January 18, 2012
Eurozone Auctions Decent, IMF to Increase Lending
http://ashraflaidi.com/t/?h3055
January 18, 2012 08:12 ET: IMF proposes lending expansion to $1 trillion; UK jobless claims rose, unemployment rate ticks up; Swiss ZEW improved; Eurozone construction output rose. Decent German and Portuguese auctions. Market turns to PPI, capacity utilization, industrial production and BOC press conference. All of last night's 13 new Premium trades are in progress, find which hit all targets below.
Sentiment improved after IMF sources said the Fund is looking to increase its lending abilities up to USD 1 trillion. BRIC countries together with Japan and some oil exporting nations should be the biggest contributors. The deal should be concluded before the G20 meeting at the end of February.
On the data front we learned that:
In the UK, December jobless claims rose 1.2K and the claimant count remained at 5%. The ILO unemployment rate ticked up to 8.4% from 8.3%.
Swiss ZEW economic expectations index improved in January to -50.1 from previous -72.
Eurozone November construction output rose 0.8% m/m from -1.4% (0.2% y/y)
Germany sold today EUR 3.44 bln worth of 2 year bonds (EUR 4 bln target). The average yield dropped to 0.17% from previous 0.29% and bid to cover improved to 2.2 from 1.4. Portugal reached its full target as it sold EUR 2.5 bln worth of bills. The debt market will focus on Spanish auction tomorrow that targets EUR 4.5 bln.
As has become the norm recently, the ECB deposits reached a new high on Tuesday at EUR 528.18 bln, more than EUR 25 bln over Monday's record.
Busy US session is ahead today. It kicks off at 8:30 am with December PPI that is expected to decline to 5.1% from 5.7% on annual basis (core PPI exp. 2.8% from 2.9%) followed by net long term TIC flows at 9:00 am that are seen higher at USD 27.3 bln in November from October's USD 4.8 bln.
Capacity utilization and industrial production are both due at 9:15 am and are anticipated higher at 78.2% from 77.8% and 0.5% from -0.2% respectively.
CAD traders will watch the 10:30 EST BoC monetary policy report, followed by the 11:15 BoC press conference.
Coming up before the end of the session at 4:45 pm ET is New Zealand's Q4 CPI that is expected to drop to 2.6% from 4.6% y/y but remain steady at 0.4% q/q.
ALl of our 13 Premium Intermarket have either hit all targets or are in progress, with new Daily & Weekly oscillator charts on gold & EURUSD.
Direct access to link http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=584 First time subscribers can get free trial here: http://www.ashraflaidi.com/ products/ sub01/
Patrik Urban
January 18, 2012 08:12 ET: IMF proposes lending expansion to $1 trillion; UK jobless claims rose, unemployment rate ticks up; Swiss ZEW improved; Eurozone construction output rose. Decent German and Portuguese auctions. Market turns to PPI, capacity utilization, industrial production and BOC press conference. All of last night's 13 new Premium trades are in progress, find which hit all targets below.
Sentiment improved after IMF sources said the Fund is looking to increase its lending abilities up to USD 1 trillion. BRIC countries together with Japan and some oil exporting nations should be the biggest contributors. The deal should be concluded before the G20 meeting at the end of February.
On the data front we learned that:
In the UK, December jobless claims rose 1.2K and the claimant count remained at 5%. The ILO unemployment rate ticked up to 8.4% from 8.3%.
Swiss ZEW economic expectations index improved in January to -50.1 from previous -72.
Eurozone November construction output rose 0.8% m/m from -1.4% (0.2% y/y)
Germany sold today EUR 3.44 bln worth of 2 year bonds (EUR 4 bln target). The average yield dropped to 0.17% from previous 0.29% and bid to cover improved to 2.2 from 1.4. Portugal reached its full target as it sold EUR 2.5 bln worth of bills. The debt market will focus on Spanish auction tomorrow that targets EUR 4.5 bln.
As has become the norm recently, the ECB deposits reached a new high on Tuesday at EUR 528.18 bln, more than EUR 25 bln over Monday's record.
Busy US session is ahead today. It kicks off at 8:30 am with December PPI that is expected to decline to 5.1% from 5.7% on annual basis (core PPI exp. 2.8% from 2.9%) followed by net long term TIC flows at 9:00 am that are seen higher at USD 27.3 bln in November from October's USD 4.8 bln.
Capacity utilization and industrial production are both due at 9:15 am and are anticipated higher at 78.2% from 77.8% and 0.5% from -0.2% respectively.
CAD traders will watch the 10:30 EST BoC monetary policy report, followed by the 11:15 BoC press conference.
Coming up before the end of the session at 4:45 pm ET is New Zealand's Q4 CPI that is expected to drop to 2.6% from 4.6% y/y but remain steady at 0.4% q/q.
ALl of our 13 Premium Intermarket have either hit all targets or are in progress, with new Daily & Weekly oscillator charts on gold & EURUSD.
Direct access to link http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=584 First time subscribers can get free trial here: http://www.ashraflaidi.com/ products/ sub01/
Patrik Urban
Tuesday, January 17, 2012
Positive Eurozone Data Lifts EURUSD to 1.28
http://www.ashraflaidi.com/forex-news/?a=3051
January 17, 2012 07:59 ET: Spanish bond auction solid; UK CPI sharply lower; German ZEW improved; Eurozone ZEW stronger. ECB deposits above half a trillion euro. Market turns to empire state manufacturing and Canadian securities transactions and BOC rate announcement. Fitch says Greece will have an orderly default.
USD is lower across the board in the ongoing session. Major European equity indices are higher by about 0.9% to 1.6% and relative strength winners are NZD and AUD.
Another solid bond auction results were seen today as Spain sold EUR 4.88 bln (EUR 4-5 bln target) worth of bonds. 1/2013 bond sold with average yield 2.049%, considerably lower from previous 4.05% with higher bid to cover at 3.55 from 3.14 and 6/2013 bond sold at 2.399% from 4.226%.
Meanwhile, Fitch said a Greek default was imminent and that "We have said for a long time that we don't think this PSI is the way to go and we would treat it as a default. It clearly is a default, however they try to spin it"
In the UK, headline annual CPI fell sharply to 4.2% in December from previous 4.8% which is the biggest fall since 4/2009 caused by lower price of petrochemicals and clothing. Core print declined to 3% from 3.2%. EURGBP is gaining on the news trading firmly above 0.83 from today's low at 0.8277.
On the European data front, German ZEW economic sentiment index improved considerably to -21.6 in January from -53.8 in December and current situation component picked up to 28.4 from 26.8. Eurozone ZEW economic sentiment index improved to -32.5 from -54.1 and annual CPI declined to 2.7% in December from 2.8%.
The ECB deposit facility breached above half a trillion on Monday as deposits rose to EUR 501.93 bln from Friday's EUR 493 bln.
The NY session will start at 8:30 am with Empire state manufacturing index that is expected to increase in January to 10.8 from previous 9.5.
Canadian data include international securities transactions that are due at 8:30 am and are seen higher in November at CAD 6.97 bln from October's CAD 2.03 bln. The impact may be muted as traders will await the BOC rate decision at 9:00 am. It is widely expected that the BOC will hold rates steady at 1%.
GBP volatility is likely to increase at 1:30 pm when MPC member Adam Posen speaks in London.
Patrik Urban
January 17, 2012 07:59 ET: Spanish bond auction solid; UK CPI sharply lower; German ZEW improved; Eurozone ZEW stronger. ECB deposits above half a trillion euro. Market turns to empire state manufacturing and Canadian securities transactions and BOC rate announcement. Fitch says Greece will have an orderly default.
USD is lower across the board in the ongoing session. Major European equity indices are higher by about 0.9% to 1.6% and relative strength winners are NZD and AUD.
Another solid bond auction results were seen today as Spain sold EUR 4.88 bln (EUR 4-5 bln target) worth of bonds. 1/2013 bond sold with average yield 2.049%, considerably lower from previous 4.05% with higher bid to cover at 3.55 from 3.14 and 6/2013 bond sold at 2.399% from 4.226%.
Meanwhile, Fitch said a Greek default was imminent and that "We have said for a long time that we don't think this PSI is the way to go and we would treat it as a default. It clearly is a default, however they try to spin it"
In the UK, headline annual CPI fell sharply to 4.2% in December from previous 4.8% which is the biggest fall since 4/2009 caused by lower price of petrochemicals and clothing. Core print declined to 3% from 3.2%. EURGBP is gaining on the news trading firmly above 0.83 from today's low at 0.8277.
On the European data front, German ZEW economic sentiment index improved considerably to -21.6 in January from -53.8 in December and current situation component picked up to 28.4 from 26.8. Eurozone ZEW economic sentiment index improved to -32.5 from -54.1 and annual CPI declined to 2.7% in December from 2.8%.
The ECB deposit facility breached above half a trillion on Monday as deposits rose to EUR 501.93 bln from Friday's EUR 493 bln.
The NY session will start at 8:30 am with Empire state manufacturing index that is expected to increase in January to 10.8 from previous 9.5.
Canadian data include international securities transactions that are due at 8:30 am and are seen higher in November at CAD 6.97 bln from October's CAD 2.03 bln. The impact may be muted as traders will await the BOC rate decision at 9:00 am. It is widely expected that the BOC will hold rates steady at 1%.
GBP volatility is likely to increase at 1:30 pm when MPC member Adam Posen speaks in London.
Patrik Urban
Friday, January 13, 2012
EURUSD Under 1.28 After Mixed Italian Auctions
January 13, 2012 08:13 ET : EURUSD sells off after Italian auction resulted in lower yield but also lower bid/cover ratio; Eurozone trade surplus grew; ECB deposit facility at a record high again. Market turns to US and Canadian trade balance data and UoM consumer confidence. Details on latest Premium Intermarket Insights are below.
The recovery that started yesterday after successful Spanish and Italian auctions ran out of steam today as EURUSD sold lower to below 1.28. Surprisingly, the decline started right after Italy was able to reach its target and sell EUR 4.75 bln worth of bonds. The largest auction was EUR 3 bln 2014 BTP that resulted in lower average yield at 4.83% from previous 5.62%. However, bid to cover declined to 1.215 from 1.364. Perhaps, Fitch's threat of Italian downgrade that should be resolved by month's end stayed on traders minds.
European data was limited today to Eurozone trade balance that in November reached the highest surplus in nearly two years at EUR 6.1 bln from previous EUR 0.5 bln . Exports rose 3.9% while imports remained steady. Solid export growth could elevate fears of a severe downturn.
In other news, the ECB said that the deposit facility reached a new high at EUR 489.906 bln which is EUR 3 bln more than on Tuesday and MNI reports that ECB ex-president J. C. Trichet sought clearance to become the chairman of Bruegel institute, European think tank working in the field of international economics.
The New York session will kick off at 8:30 am ET with trade deficit that is expected to widen in November to USD -44.8 bln from previous USD -43.5 bln followed by University of Michigan consumer confidence due at 9:55 am that is seen higher in January at 71.5 from December's 69.9.
Canadian statistics office will release the latest trade balance data at 8:30 am with trade deficit likely widening to CAD -0.5 bln in November from previous CAD -0.89 bln.
Our Premium Intermarket Insights include 10 new trades on including EURUSD, AUDUSD, EURGBP and US crude, with existing trades in CADJPY, USDCAD, USDJPY and silver The trades are for Fridays Asia/EU/US sessions http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=582 Non subscribers can get access here: http://www.ashraflaidi.com/ products/ sub01
Patrik Urban
The recovery that started yesterday after successful Spanish and Italian auctions ran out of steam today as EURUSD sold lower to below 1.28. Surprisingly, the decline started right after Italy was able to reach its target and sell EUR 4.75 bln worth of bonds. The largest auction was EUR 3 bln 2014 BTP that resulted in lower average yield at 4.83% from previous 5.62%. However, bid to cover declined to 1.215 from 1.364. Perhaps, Fitch's threat of Italian downgrade that should be resolved by month's end stayed on traders minds.
European data was limited today to Eurozone trade balance that in November reached the highest surplus in nearly two years at EUR 6.1 bln from previous EUR 0.5 bln . Exports rose 3.9% while imports remained steady. Solid export growth could elevate fears of a severe downturn.
In other news, the ECB said that the deposit facility reached a new high at EUR 489.906 bln which is EUR 3 bln more than on Tuesday and MNI reports that ECB ex-president J. C. Trichet sought clearance to become the chairman of Bruegel institute, European think tank working in the field of international economics.
The New York session will kick off at 8:30 am ET with trade deficit that is expected to widen in November to USD -44.8 bln from previous USD -43.5 bln followed by University of Michigan consumer confidence due at 9:55 am that is seen higher in January at 71.5 from December's 69.9.
Canadian statistics office will release the latest trade balance data at 8:30 am with trade deficit likely widening to CAD -0.5 bln in November from previous CAD -0.89 bln.
Our Premium Intermarket Insights include 10 new trades on including EURUSD, AUDUSD, EURGBP and US crude, with existing trades in CADJPY, USDCAD, USDJPY and silver The trades are for Fridays Asia/EU/US sessions http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=582 Non subscribers can get access here: http://www.ashraflaidi.com/ products/ sub01
Patrik Urban
Thursday, January 12, 2012
BoE, ECB Keep Steady, Draghi's Outlook is Next
http://ashraflaidi.com/t/?h3041
January 12, 2012 07:47 ET: BOE kept rates and asset purchases unchanged; ECB holds steady at 1.0%, strong bond auctions lifted the common currency; Italian industrial production rose; Eurozone industrial production declined; UK manufacturing and industrial production both fell. ECB press conference, retail sales and jobless claims are next.
The USD is lower in the ongoing session against all majors. European equities are higher by 1.1% to 1.5% and relative strength winners are AUD and CHF.
Metals extend gains, with both gold and silver hitting 4-week highs at 1658 and 30.67 respectively. See our latest silver charts at our latest Premium Intermarket Insights in here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=580
Solid bond auctions from Spain and Italy underpinned the Euro and helped it to recover to 1.2760 after touching 1.27 low earlier during the session. Italy reached its target and sold EUR 12 bln worth of bonds today. May 2012 BOT sold with average yield 1.644% with bid to cover at 1.853 while January 2013 BOT averaged 2.735%, considerably lower from previous 5.952% with bid to cover falling to 1.47 from 1.92.
The Spanish auction was even better as Spain sold nearly EUR 10 bln worth of bonds, significantly above the EUR 4-5 bln target. The biggest auction that reached EUR 4.27 bln was for July 2015 bond that averaged 3.384% with 1.797 cover. Spain was already able to complete 11.6% of its 2012 gross funding needs.
On European data front, Italian industrial production rose 0.3% in November after October's -0.9% contraction and Eurozone's industrial production declined -0.1% m/m and -0.3% y/y.
In the UK, November manufacturing production fell -0.6% y/y after 0.1% growth seen in October while industrial production dropped -3.1% y/y from previous -2.1%.
The BoE chose the wait and see approach, held rates steady at 0.5% and kept QE unchanged at 275 bln. However, falling manufacturing and industrial production imply a higher chance of more QE in the months ahead.
The ECB kept rates unchanged at 1.0% as widely expected. It is not anticipated to announce any new additional easing steps at the 8:30 EST conference.
The New York session starts at 8:30 am ET with ECB press conference that should provide hints about future easing or new liquidity enhancing mechanisms and is likely to set the tone for trading for the rest of the session.
December retail sales are due at the same time and are seen higher at 0.3% from previous 0.2% (core also expected to rise 0.3% from 0.2%). Jobless claims are anticipated marginally higher at 373K from 372K and November business inventories are seen lower at 0.4% from 0.8%.
The latest tactical trades on CHF peg and the current positioning in USDCAD and CADJPY are found here http://ashraflaidi.com/ products/ sub01/ access/ ?a=581 and here http://ashraflaidi.com/ products/sub01/access/?a=580
Patrik Urban
January 12, 2012 07:47 ET: BOE kept rates and asset purchases unchanged; ECB holds steady at 1.0%, strong bond auctions lifted the common currency; Italian industrial production rose; Eurozone industrial production declined; UK manufacturing and industrial production both fell. ECB press conference, retail sales and jobless claims are next.
The USD is lower in the ongoing session against all majors. European equities are higher by 1.1% to 1.5% and relative strength winners are AUD and CHF.
Metals extend gains, with both gold and silver hitting 4-week highs at 1658 and 30.67 respectively. See our latest silver charts at our latest Premium Intermarket Insights in here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=580
Solid bond auctions from Spain and Italy underpinned the Euro and helped it to recover to 1.2760 after touching 1.27 low earlier during the session. Italy reached its target and sold EUR 12 bln worth of bonds today. May 2012 BOT sold with average yield 1.644% with bid to cover at 1.853 while January 2013 BOT averaged 2.735%, considerably lower from previous 5.952% with bid to cover falling to 1.47 from 1.92.
The Spanish auction was even better as Spain sold nearly EUR 10 bln worth of bonds, significantly above the EUR 4-5 bln target. The biggest auction that reached EUR 4.27 bln was for July 2015 bond that averaged 3.384% with 1.797 cover. Spain was already able to complete 11.6% of its 2012 gross funding needs.
On European data front, Italian industrial production rose 0.3% in November after October's -0.9% contraction and Eurozone's industrial production declined -0.1% m/m and -0.3% y/y.
In the UK, November manufacturing production fell -0.6% y/y after 0.1% growth seen in October while industrial production dropped -3.1% y/y from previous -2.1%.
The BoE chose the wait and see approach, held rates steady at 0.5% and kept QE unchanged at 275 bln. However, falling manufacturing and industrial production imply a higher chance of more QE in the months ahead.
The ECB kept rates unchanged at 1.0% as widely expected. It is not anticipated to announce any new additional easing steps at the 8:30 EST conference.
The New York session starts at 8:30 am ET with ECB press conference that should provide hints about future easing or new liquidity enhancing mechanisms and is likely to set the tone for trading for the rest of the session.
December retail sales are due at the same time and are seen higher at 0.3% from previous 0.2% (core also expected to rise 0.3% from 0.2%). Jobless claims are anticipated marginally higher at 373K from 372K and November business inventories are seen lower at 0.4% from 0.8%.
The latest tactical trades on CHF peg and the current positioning in USDCAD and CADJPY are found here http://ashraflaidi.com/ products/ sub01/ access/ ?a=581 and here http://ashraflaidi.com/ products/sub01/access/?a=580
Patrik Urban
Wednesday, January 11, 2012
Euro Struggles at 1.27 as Fitch, EU Meetings Loom
http://www.ashraflaidi.com/forex-news/?a=3037
January 11, 2012 08:23 ET: Fitch's comments send Euro lower; German GDP at 3%; UK trade deficit widens; German and UK decent bond auctions; ECB deposit facility at another record high. Market turns to crude oil inventories and later to Beige book. Commodity FX steady across the board, led by the Kiwi, Norwegian Krone and Canadian dollar. Ashraf's latest Premium Intermarket Insights arguing for CAD crosses.
USD is higher across the board, European equities are lower by about 0.7%, relative strength losers are EUR and CHF.
USD surges higher in the last two hours on Fitch's comments that ECB must do more to prevent cataclysmic euro collapse.
On the data front, German annual GDP was 3%, lower from previous 3.7% suggesting stronger momentum than originally projected. However, considerable slowdown in 2012 and the possibility of a recession in Q1 is still probable. The annual budget deficit improved to -1% of GDP from previous -4.3% of GDP.
In the UK, visible trade deficit widened in November to GBP -8.64 bln from October's GBP -7.86 bln. Both lower exports (-1.5%) and higher imports (+1.1%) contributed. Imports included record purchases of medical chemicals and crude oil.
The bond market saw two decent auctions today. Germany sold EUR 3.153 bln 5 year bonds with the yield below 1% for the first time. The average yield was 0.9% from previous 1.11% and bid to cover improved to 2.8 from 2.1. UK sold GBP 3 bln of 2021 Gilt with lower average yield at 2.085% from 2.382% while bid to cover improved to 2.15 from 1.61.
As has become the norm these days, deposits at the ECB broke to a fresh record at EUR 485.9 bln from yesterday's EUR 481.9 bln.
Market volatility could increase today at 9:00 am when Atlanta FED president and alternate FOMC member Dennis Lockhart speaks on the US economy in Atlanta.
US data is limited today to crude oil inventories that are due at 10:30 am ET and are expected to decline to 0.9M barrels from 2.2M barrels. Given the recent strength in oil and higher CAD, the market impact could be stronger today than usual.
The FED will release its beige book at 2:00 pm.
EURUSD shorts hit all targets but Aussie longs and oil shorts were stopped out. The 2 USDCAD and 2 CADJPY remain in progress as well the gold and silver trades . Those Tuesday trades can be accessed here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=580 Non subscribers can get a 1-week free trial here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
January 11, 2012 08:23 ET: Fitch's comments send Euro lower; German GDP at 3%; UK trade deficit widens; German and UK decent bond auctions; ECB deposit facility at another record high. Market turns to crude oil inventories and later to Beige book. Commodity FX steady across the board, led by the Kiwi, Norwegian Krone and Canadian dollar. Ashraf's latest Premium Intermarket Insights arguing for CAD crosses.
USD is higher across the board, European equities are lower by about 0.7%, relative strength losers are EUR and CHF.
USD surges higher in the last two hours on Fitch's comments that ECB must do more to prevent cataclysmic euro collapse.
On the data front, German annual GDP was 3%, lower from previous 3.7% suggesting stronger momentum than originally projected. However, considerable slowdown in 2012 and the possibility of a recession in Q1 is still probable. The annual budget deficit improved to -1% of GDP from previous -4.3% of GDP.
In the UK, visible trade deficit widened in November to GBP -8.64 bln from October's GBP -7.86 bln. Both lower exports (-1.5%) and higher imports (+1.1%) contributed. Imports included record purchases of medical chemicals and crude oil.
The bond market saw two decent auctions today. Germany sold EUR 3.153 bln 5 year bonds with the yield below 1% for the first time. The average yield was 0.9% from previous 1.11% and bid to cover improved to 2.8 from 2.1. UK sold GBP 3 bln of 2021 Gilt with lower average yield at 2.085% from 2.382% while bid to cover improved to 2.15 from 1.61.
As has become the norm these days, deposits at the ECB broke to a fresh record at EUR 485.9 bln from yesterday's EUR 481.9 bln.
Market volatility could increase today at 9:00 am when Atlanta FED president and alternate FOMC member Dennis Lockhart speaks on the US economy in Atlanta.
US data is limited today to crude oil inventories that are due at 10:30 am ET and are expected to decline to 0.9M barrels from 2.2M barrels. Given the recent strength in oil and higher CAD, the market impact could be stronger today than usual.
The FED will release its beige book at 2:00 pm.
EURUSD shorts hit all targets but Aussie longs and oil shorts were stopped out. The 2 USDCAD and 2 CADJPY remain in progress as well the gold and silver trades . Those Tuesday trades can be accessed here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=580 Non subscribers can get a 1-week free trial here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Tuesday, January 10, 2012
USD Fades as Stocks Extend Towards 5-Month Highs
http://www.ashraflaidi.com/forex-news/?a=3033
January 10, 2012 09:06 ET: Greek auction results in a lower yield but bid to cover declined as well. Focus shifting to Ireland; ECB deposits at record highs again. Canadian housing starts surprise on the upside, prompting further bids in the oil-fuelled CAD. US IBD/TIPP economic optimism and wholesale inventories are both due at 10 am EST. Tuesdays Premium trades are up.
Euro recovery continues and EURUSD breaks above 1.28. The greenback is broadly weaker. European equity indices gained around 2% and the relative strength winners are NZD and AUD.
In light of yesterday's Merkel/Sarkozy comments that the second bailout fund would not be released until an agreement regarding restructuring is signed, the market cautiously awaited Greek debt auction results. Greece was able to sell EUR 1.625 bln (only EUR 1.25 bln expected) of 6 month bills with 4.90% average yield (previous 4.95%). Bid to cover declined to 2.8 from previous 2.93. Markets will now shift focus to German auction tomorrow, Spanish auction on Thursday and Italian auction on Friday.
The deposits at the ECB continue to break records every day. The ECB reported that deposits increased to EUR 481.94 bln yesterday, significantly higher compared to weekend's EUR 463.6 bln.
Traders' attention is shifting to Ireland again as rumors that debt restructuring or a second bailout may be needed started to appear. Irish spreads are widening and IMF inspectors returned to Ireland to make sure the bailout conditions are adhered to. The European commission has said that aid plan is working and there is no point in debating another.
WTI, gold and silver enjoyed a considerable rise over the past few sessions. WTI pulled back to 102.65 after touching 103, gold trades near session highs around 1630 and silver soared nearly to 30. It currently trades around 29.70.
Canadian housing starts rose to 200K in December from 185K, prompting further bullishness in CAD, which is backed by surging energy prices.
US data includes January IBD/TIPP economic optimism index that is seen higher at 45.3 from previous 42.8 and November wholesale inventories that are anticipated to rise by 0.5%, lower compared to previous 1.6%. Both releases are due at 10:00 am.
The market could also react when Chancellor Merkel meets IMF's head Christine Lagarde in Berlin at 2:00 pm.
Tuesdays latest Premium trades include USDCAD, CADJPY and US crude. These can be accessed in http://ashraflaidi.com/ products/ sub01/ access/ ?a=580 NON-subscribers can click here to join: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
January 10, 2012 09:06 ET: Greek auction results in a lower yield but bid to cover declined as well. Focus shifting to Ireland; ECB deposits at record highs again. Canadian housing starts surprise on the upside, prompting further bids in the oil-fuelled CAD. US IBD/TIPP economic optimism and wholesale inventories are both due at 10 am EST. Tuesdays Premium trades are up.
Euro recovery continues and EURUSD breaks above 1.28. The greenback is broadly weaker. European equity indices gained around 2% and the relative strength winners are NZD and AUD.
In light of yesterday's Merkel/Sarkozy comments that the second bailout fund would not be released until an agreement regarding restructuring is signed, the market cautiously awaited Greek debt auction results. Greece was able to sell EUR 1.625 bln (only EUR 1.25 bln expected) of 6 month bills with 4.90% average yield (previous 4.95%). Bid to cover declined to 2.8 from previous 2.93. Markets will now shift focus to German auction tomorrow, Spanish auction on Thursday and Italian auction on Friday.
The deposits at the ECB continue to break records every day. The ECB reported that deposits increased to EUR 481.94 bln yesterday, significantly higher compared to weekend's EUR 463.6 bln.
Traders' attention is shifting to Ireland again as rumors that debt restructuring or a second bailout may be needed started to appear. Irish spreads are widening and IMF inspectors returned to Ireland to make sure the bailout conditions are adhered to. The European commission has said that aid plan is working and there is no point in debating another.
WTI, gold and silver enjoyed a considerable rise over the past few sessions. WTI pulled back to 102.65 after touching 103, gold trades near session highs around 1630 and silver soared nearly to 30. It currently trades around 29.70.
Canadian housing starts rose to 200K in December from 185K, prompting further bullishness in CAD, which is backed by surging energy prices.
US data includes January IBD/TIPP economic optimism index that is seen higher at 45.3 from previous 42.8 and November wholesale inventories that are anticipated to rise by 0.5%, lower compared to previous 1.6%. Both releases are due at 10:00 am.
The market could also react when Chancellor Merkel meets IMF's head Christine Lagarde in Berlin at 2:00 pm.
Tuesdays latest Premium trades include USDCAD, CADJPY and US crude. These can be accessed in http://ashraflaidi.com/ products/ sub01/ access/ ?a=580 NON-subscribers can click here to join: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Monday, January 9, 2012
ECB Deposits at New High, German Bills Hit Negative Yield, Aussie Worst Performer
http://www.ashraflaidi.com/forex-news/?a=3029
January 9, 2012 07:11 ET: German trade surplus higher but industrial production declined; Eurozone Sentix investor confidence improved; ECB deposits reached a new high and German auction sees a negative yield for the first time ever. Market turns to Merkel/Sarkozy press conference, Canadian building permits and US consumer credit. Aussie is the weakest performer despite improved risk appetite after disappointing Aussie retail sales. Ashraf's Premium Intermarket Insights are due ahead of the US opening bell.
EURUSD fell to 1.2667 in early Asian trading but has recovered to 1.2785 during the London session. USD trades lower across the board, major European equities are lower by about 0.25% and the relative strength winner is NZD.
German data was mixed today as the trade surplus was better than expected and higher in November at EUR 15.1 bln from previous EUR 12.5 bln but the industrial production declined -0.6% in November after growing 0.8% previously. This fall pulled the annual figure to 3.6% from 4.2%.
Eurozone Sentix investor confidence improved slightly to -21.1 in January after falling to a two year low at -24 a month earlier. This marks the first improvement in five months.
In other news, the ECB said today that overnight deposits reached another high on Friday at EUR 463.6 bln, about EUR 8 bln more compared to last Thursday and Germany paid a negative yield at a bill auction today for the first time ever. It sold EUR 3.9 bln worth of 6 month bills with average yield -0.0122% from previous 0.001%. However, bid to cover fell considerably to 1.8 from 3.8.
Market volatility could increase when chancellor Merkel holds a joint press conference with president Sarkozy in Berlin today at 7:30 am ET and also at 10:30 am ET when Merkel speaks at a conference of the DBB trade union.
The NY session will bring Canadian building permits at 8:30 am ET that are expected to decline -3.1% in November after surging 11.9% in October. CAD traders should also pay attention at 10:30 am when the BOC releases its business outlook survey.
US data is limited to consumer credit due at 3:00 pm that is seen lower in November at USD 7 bln from previous USD 7.64 bln.
Market volatility could also increase at 12:40 pm when Atlanta's FED president Dennis Lockhart speaks about the US economy in Atlanta.
Patrik Urban
January 9, 2012 07:11 ET: German trade surplus higher but industrial production declined; Eurozone Sentix investor confidence improved; ECB deposits reached a new high and German auction sees a negative yield for the first time ever. Market turns to Merkel/Sarkozy press conference, Canadian building permits and US consumer credit. Aussie is the weakest performer despite improved risk appetite after disappointing Aussie retail sales. Ashraf's Premium Intermarket Insights are due ahead of the US opening bell.
EURUSD fell to 1.2667 in early Asian trading but has recovered to 1.2785 during the London session. USD trades lower across the board, major European equities are lower by about 0.25% and the relative strength winner is NZD.
German data was mixed today as the trade surplus was better than expected and higher in November at EUR 15.1 bln from previous EUR 12.5 bln but the industrial production declined -0.6% in November after growing 0.8% previously. This fall pulled the annual figure to 3.6% from 4.2%.
Eurozone Sentix investor confidence improved slightly to -21.1 in January after falling to a two year low at -24 a month earlier. This marks the first improvement in five months.
In other news, the ECB said today that overnight deposits reached another high on Friday at EUR 463.6 bln, about EUR 8 bln more compared to last Thursday and Germany paid a negative yield at a bill auction today for the first time ever. It sold EUR 3.9 bln worth of 6 month bills with average yield -0.0122% from previous 0.001%. However, bid to cover fell considerably to 1.8 from 3.8.
Market volatility could increase when chancellor Merkel holds a joint press conference with president Sarkozy in Berlin today at 7:30 am ET and also at 10:30 am ET when Merkel speaks at a conference of the DBB trade union.
The NY session will bring Canadian building permits at 8:30 am ET that are expected to decline -3.1% in November after surging 11.9% in October. CAD traders should also pay attention at 10:30 am when the BOC releases its business outlook survey.
US data is limited to consumer credit due at 3:00 pm that is seen lower in November at USD 7 bln from previous USD 7.64 bln.
Market volatility could also increase at 12:40 pm when Atlanta's FED president Dennis Lockhart speaks about the US economy in Atlanta.
Patrik Urban
Friday, January 6, 2012
Markets Steady As Focus Shifts To NFP
http://www.ashraflaidi.com/forex-news/?a=3024
January 6, 2012 08:20 ET : German factory orders fell; Eurozone retail sales declined; Swiss deflation intensifies; Canadian labor data mixed. Market turns to NFP, unemployment rate and hourly earnings.
The greenback is little changed as traders await the NFP report. Major European equity indices are higher by about 0.2% to 0.5%.
EURUSD is steady despite German factory orders that fell 4.8% in November after surging 5% in October. Other data does not provide a reason for optimism either - Eurozone retail sales declined -0.8% in November after they grew 0.1% in October. The annual figure worsened considerably as it declined -2.5% from previous -0.7%. The unemployment rate remained steady at 10.3%. EURUSD trades right below the 1.28 figure.
Swiss CPI declined -0.2% in December after a decline of the same magnitude in November which translates to a deflation of -0.7% y/y, more intense than previous -0.5%. Worsening deflationary pressures should underpin EURCHF but the pair trades lower around 1.2175.
Canadian net change in employment during December was 17.5K (exp. 17.8K) after a surprising -18.6K decline seen in November. The unemployment rate ticked higher to 7.5% from previous 7.4%.
In other news, banks deposited a new record amount EUR 455 bln to ECB overnight deposit facility as risk off sentiment continues to dominate the markets. Italian 10 year yield reached to 7.15% with 10 year Italian-German spread at 524 bps. There is no sovereign bond issuance today.
The NY session will bring eagerly awaited December NFP report at 8:30 am ET that is expected to improve to 152K from previous 120K. The unemployment rate is seen marginally higher at 8.7% after falling rapidly to 8.6% in November. Hourly earnings should rise 0.2% after falling 0.1%.
Considering the recent fundamental improvement (ISM and PMI indices, consumer confidence etc.) and yesterday's strong ADP report the likelihood of a solid print is high. However, given the high expectations, it is possible that a print in line with expectations could be seen as disappointing and therefore bad for the USD.
Market volatility could also increase at 9:00 am, 12:40 pm and at 1:00 pm when FOMC members Dudley, Duke and Raskin deliver speeches at various economic forums.
Patrik Urban
January 6, 2012 08:20 ET : German factory orders fell; Eurozone retail sales declined; Swiss deflation intensifies; Canadian labor data mixed. Market turns to NFP, unemployment rate and hourly earnings.
The greenback is little changed as traders await the NFP report. Major European equity indices are higher by about 0.2% to 0.5%.
EURUSD is steady despite German factory orders that fell 4.8% in November after surging 5% in October. Other data does not provide a reason for optimism either - Eurozone retail sales declined -0.8% in November after they grew 0.1% in October. The annual figure worsened considerably as it declined -2.5% from previous -0.7%. The unemployment rate remained steady at 10.3%. EURUSD trades right below the 1.28 figure.
Swiss CPI declined -0.2% in December after a decline of the same magnitude in November which translates to a deflation of -0.7% y/y, more intense than previous -0.5%. Worsening deflationary pressures should underpin EURCHF but the pair trades lower around 1.2175.
Canadian net change in employment during December was 17.5K (exp. 17.8K) after a surprising -18.6K decline seen in November. The unemployment rate ticked higher to 7.5% from previous 7.4%.
In other news, banks deposited a new record amount EUR 455 bln to ECB overnight deposit facility as risk off sentiment continues to dominate the markets. Italian 10 year yield reached to 7.15% with 10 year Italian-German spread at 524 bps. There is no sovereign bond issuance today.
The NY session will bring eagerly awaited December NFP report at 8:30 am ET that is expected to improve to 152K from previous 120K. The unemployment rate is seen marginally higher at 8.7% after falling rapidly to 8.6% in November. Hourly earnings should rise 0.2% after falling 0.1%.
Considering the recent fundamental improvement (ISM and PMI indices, consumer confidence etc.) and yesterday's strong ADP report the likelihood of a solid print is high. However, given the high expectations, it is possible that a print in line with expectations could be seen as disappointing and therefore bad for the USD.
Market volatility could also increase at 9:00 am, 12:40 pm and at 1:00 pm when FOMC members Dudley, Duke and Raskin deliver speeches at various economic forums.
Patrik Urban
Thursday, January 5, 2012
Falling German Sales Add to Euros Sub 1.29 Drop
http://www.ashraflaidi.com/forex-news/?a=3021
January 5, 2012 07:47 ET: German retail sales dropped; Eurozone industrial orders rose and PPI declined; UK PMI hit 5-month high; French bond auction saw lower bid to cover ratios. Market turns to ADP, jobless claims and ISM non-manufacturing. Canadian data will include RMPI and Ivey PMI. Ashrafs Thursday Intermarket Insights will be posted at the open of the US stocks session.
The greenback is higher against all majors in the ongoing session. The biggest relative strength losers are NZD and AUD. Major European equity indices are lower by 1% to 2.1%.
EURUSD fell sharply after German retail sales declined -0.9% in November from previous -0.2% which is considerably below market expectations of 0.2% growth. Eurozone industrial orders that rose 1.8% in October after declining -6.4% in September (1.6% y/y) were not able to stop common currency's decline as it slid to a low at 1.2830. Eurozone November PPI declined to 5.3% from 5.5% y/y indicating that even consumer inflation should continue to slow and come closer to ECB's 2% target.
UK PMI services rose to a five months high at 54.0 in December from 52.1 which is significantly above expectations of 51.6. The business expectations component fell to 63.5 from 67.4 but activity and new work both increased at the fastest pace since July. The improvement in both manufacturing and services PMI reduces the probability of an increase of the Asset Purchase Facility. The MPC meets next Thursday. EURGBP dropped to 0.8253, lowest since September 2010.
France sold EUR 7.963 bln (EUR 7-8 bln target) worth of bonds with various maturities today. The largest auction, EUR 4.02 bln 2021 OAT resulted in a slightly higher yield 3.29% from 3.18% and bid to cover was 1.64, considerably below previous 3.05.
The New York session starts at 8:15 am ET with ADP report that is anticipated to decline in December to 176K from previous 206K followed by jobless claims at 8:30 am that are seen lower at 375K from previous 381K. Today's ADP is likely to have a larger impact than usual as traders will look for hints on the first 2012 NFP release that is due tomorrow.
ISM non-manufacturing due at 10:00 am is expected to rise in December to 53 from November's 52.
Canadian data include raw materials price index at 8:30 am seen at 0.1% in November after contracting -1.2% in October followed by Ivey PMI at 10:00 am expected to decline slightly to 57.5 from 59.9.
Patrik Urban
January 5, 2012 07:47 ET: German retail sales dropped; Eurozone industrial orders rose and PPI declined; UK PMI hit 5-month high; French bond auction saw lower bid to cover ratios. Market turns to ADP, jobless claims and ISM non-manufacturing. Canadian data will include RMPI and Ivey PMI. Ashrafs Thursday Intermarket Insights will be posted at the open of the US stocks session.
The greenback is higher against all majors in the ongoing session. The biggest relative strength losers are NZD and AUD. Major European equity indices are lower by 1% to 2.1%.
EURUSD fell sharply after German retail sales declined -0.9% in November from previous -0.2% which is considerably below market expectations of 0.2% growth. Eurozone industrial orders that rose 1.8% in October after declining -6.4% in September (1.6% y/y) were not able to stop common currency's decline as it slid to a low at 1.2830. Eurozone November PPI declined to 5.3% from 5.5% y/y indicating that even consumer inflation should continue to slow and come closer to ECB's 2% target.
UK PMI services rose to a five months high at 54.0 in December from 52.1 which is significantly above expectations of 51.6. The business expectations component fell to 63.5 from 67.4 but activity and new work both increased at the fastest pace since July. The improvement in both manufacturing and services PMI reduces the probability of an increase of the Asset Purchase Facility. The MPC meets next Thursday. EURGBP dropped to 0.8253, lowest since September 2010.
France sold EUR 7.963 bln (EUR 7-8 bln target) worth of bonds with various maturities today. The largest auction, EUR 4.02 bln 2021 OAT resulted in a slightly higher yield 3.29% from 3.18% and bid to cover was 1.64, considerably below previous 3.05.
The New York session starts at 8:15 am ET with ADP report that is anticipated to decline in December to 176K from previous 206K followed by jobless claims at 8:30 am that are seen lower at 375K from previous 381K. Today's ADP is likely to have a larger impact than usual as traders will look for hints on the first 2012 NFP release that is due tomorrow.
ISM non-manufacturing due at 10:00 am is expected to rise in December to 53 from November's 52.
Canadian data include raw materials price index at 8:30 am seen at 0.1% in November after contracting -1.2% in October followed by Ivey PMI at 10:00 am expected to decline slightly to 57.5 from 59.9.
Patrik Urban
Wednesday, January 4, 2012
EURUSD Back Below 1.30 as Appetite Pauses for Steam
http://www.ashraflaidi.com/forex-news/?a=3019
January 4, 2012 07:44 ET: Eurozone CPI Slowed; German PMI services revised lower; Eurozone PMI revised higher. Overnight ECB deposits at a new record. German auction sees lower yield, UK construction PMI rose. Market turns to US factory orders.
The greenback is higher across the board in the ongoing session. The biggest losers today are CHF and NZD. Major European equities are lower by -0.6% to -1.5%.
After staying at 3% for the past three months, annual Eurozone CPI slowed in December to 2.8%. Other Eurozone news include German December PMI services that was revised lower to 52.4 from initial estimate at 52.7, Eurozone PMI services that was revised higher to 48.8 from 48.3 and Eurozone PMI composite which was also revised higher to 48.3 from 47.9.
Overnight deposits at the ECB reached a new record high on Tuesday at EUR 453.18 bln suggesting that banks do not want to lend to each other, partly due to fear of exposure to periphery debt and prefer to park their excess cash at the ECB. The use of the deposit facility that pays 0.25% has been elevated since August 2011.
Germany sold EUR 4.057 bln 10 year bonds, slightly below EUR 5 bln target. The average yield was lower at 1.93% from previous 1.98% and bid to cover improving slightly to 1.3 from 1.1. EURUSD did not respond to the announcement and continued to trade around 1.3030.
In the UK, construction PMI rose to 53.2 in December from 52.3 in November and considerably above expectations of 51.7. Mortgage approvals reached the highest since 12/2009 in November at 52.9K, marginally higher from previous 52.8K. On the release, EURGBP fell from 0.8345 to 0.8320.
The only data release for the US session is November factory orders which are seen higher 1.9% from previous contraction -0.4%. The data is due at 10:00 am ET.
Patrik Urban
January 4, 2012 07:44 ET: Eurozone CPI Slowed; German PMI services revised lower; Eurozone PMI revised higher. Overnight ECB deposits at a new record. German auction sees lower yield, UK construction PMI rose. Market turns to US factory orders.
The greenback is higher across the board in the ongoing session. The biggest losers today are CHF and NZD. Major European equities are lower by -0.6% to -1.5%.
After staying at 3% for the past three months, annual Eurozone CPI slowed in December to 2.8%. Other Eurozone news include German December PMI services that was revised lower to 52.4 from initial estimate at 52.7, Eurozone PMI services that was revised higher to 48.8 from 48.3 and Eurozone PMI composite which was also revised higher to 48.3 from 47.9.
Overnight deposits at the ECB reached a new record high on Tuesday at EUR 453.18 bln suggesting that banks do not want to lend to each other, partly due to fear of exposure to periphery debt and prefer to park their excess cash at the ECB. The use of the deposit facility that pays 0.25% has been elevated since August 2011.
Germany sold EUR 4.057 bln 10 year bonds, slightly below EUR 5 bln target. The average yield was lower at 1.93% from previous 1.98% and bid to cover improving slightly to 1.3 from 1.1. EURUSD did not respond to the announcement and continued to trade around 1.3030.
In the UK, construction PMI rose to 53.2 in December from 52.3 in November and considerably above expectations of 51.7. Mortgage approvals reached the highest since 12/2009 in November at 52.9K, marginally higher from previous 52.8K. On the release, EURGBP fell from 0.8345 to 0.8320.
The only data release for the US session is November factory orders which are seen higher 1.9% from previous contraction -0.4%. The data is due at 10:00 am ET.
Patrik Urban
Tuesday, January 3, 2012
European Data Surprises to Upside, Lifting Sentiment, Turn to US
http://www.ashraflaidi.com/forex-news/?a=3017
January 3, 2012 08:08 ET: Swiss PMI Jumped; German labor market improves; UK manufacturing PMI better than expected. Market turns to ISM manufacturing, construction spending and FOMC minutes. Ashraf will return in full operational mode on Jan 9th.
The greenback is lower across the board. Relative strength winners are NZD and AUD, closely followed by CHF. Major European equities are mixed between -0.65% to 1.2%.
Swiss SVME PMI printed solid 50.7 in December, higher than expected 45.4 and significantly stronger than previous 44.8. This is the first print above the 50 level after five months of declines. However, considering the deteriorating economy, this could be a one time aberration. EURCHF declined on the news from 1.2196 to current 1.2153
Positive German data also contributed to better sentiment, underpinning the Euro as unemployment declined by -22K in December and the unemployment rate declined to 6.8% from 6.9%.
In the UK, manufacturing PMI rose in December to 49.6 from previous 47.7. Nevertheless, today's result still indicates a sector contraction. GBPUSD jumped on the release from 1.5567 to 1.56 as a PMI decline to 47.4 was expected.
The US session will bring ISM manufacturing that is expected to rise to 53.2 in December after November's rebound to 52.7 and ISM manufacturing prices that are seen higher at 47.9 from 45.
November construction spending is anticipated to reach 0.5%, slightly lower from previous 0.8%. All three indicators are due at 10:00 am ET.
The minutes from the December 13th FOMC meeting are due at 2:00 pm ET.
Patrik Urban
January 3, 2012 08:08 ET: Swiss PMI Jumped; German labor market improves; UK manufacturing PMI better than expected. Market turns to ISM manufacturing, construction spending and FOMC minutes. Ashraf will return in full operational mode on Jan 9th.
The greenback is lower across the board. Relative strength winners are NZD and AUD, closely followed by CHF. Major European equities are mixed between -0.65% to 1.2%.
Swiss SVME PMI printed solid 50.7 in December, higher than expected 45.4 and significantly stronger than previous 44.8. This is the first print above the 50 level after five months of declines. However, considering the deteriorating economy, this could be a one time aberration. EURCHF declined on the news from 1.2196 to current 1.2153
Positive German data also contributed to better sentiment, underpinning the Euro as unemployment declined by -22K in December and the unemployment rate declined to 6.8% from 6.9%.
In the UK, manufacturing PMI rose in December to 49.6 from previous 47.7. Nevertheless, today's result still indicates a sector contraction. GBPUSD jumped on the release from 1.5567 to 1.56 as a PMI decline to 47.4 was expected.
The US session will bring ISM manufacturing that is expected to rise to 53.2 in December after November's rebound to 52.7 and ISM manufacturing prices that are seen higher at 47.9 from 45.
November construction spending is anticipated to reach 0.5%, slightly lower from previous 0.8%. All three indicators are due at 10:00 am ET.
The minutes from the December 13th FOMC meeting are due at 2:00 pm ET.
Patrik Urban
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